Back in 1949 when the first hedge fund, A.W. Jones, was formed, it was just about going long some stocks, and short other stocks.
In the last sixty-plus years, though, that strategy has become just one of a seemingly inexhaustible number of strategies funds use to turn their cash into more cash. Those strategies range from buying water rights in Australia to tracking Taiwanese semiconductor sales as a leading indicator of how the tech market will do.
In hedge-fund land, this is all just part of the game. And the game gets weird.
There’s an interesting conversation going on on Quora about the strangest strategies hedge funds use to make money. If you’re unfamiliar with the space, and want to go down the rabbit hole, you should definitely check it out.
For those within the industry, it’s just a gentle reminder that using satellite photos to get a sense of how goods are flowing in and out of businesses: normal.
Investing in countries whose debt will default so you can collect later — and maybe impounding that country’s naval vessel in the meantime — like billionaire Paul Singer’s Elliot Management has done: normal.
Hiring psychologists and linguists to analyse a Central Banker’s speeches: normal.
After a significant stay in hedge-fund land, nothing shocks anymore.